IWPP and Interest rate option: Difference between pages
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(IRO). | |||
An option relating to interest rates. | |||
Historically this was the right but not the obligation to borrow/lend a specified amount at a specified rate for a specified period. | |||
More commonly in practice the option is cash-settled based on the difference between the option strike rate and the current market rate. | |||
== See also == | == See also == | ||
* [[ | * [[Interest rate]] | ||
* [[ | * [[Interest rate guarantee]] | ||
* [[ | * [[Option]] | ||
Revision as of 15:09, 22 August 2013
(IRO).
An option relating to interest rates.
Historically this was the right but not the obligation to borrow/lend a specified amount at a specified rate for a specified period.
More commonly in practice the option is cash-settled based on the difference between the option strike rate and the current market rate.